Mortgage rates drop to lowest level in nearly 3 years
CNBC••general
Key Points:
- Mortgage rates dropped sharply after President Trump instructed Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds, leading the 30-year mortgage rate to fall 22 basis points to 5.99%, matching a low from early 2023.
- Fannie Mae and Freddie Mac buy loans from lenders and bundle them into mortgage-backed securities (MBS), which helps keep mortgage rates lower and more stable; increased purchases of MBS generally push rates down.
- Analysts predict the $200 billion MBS purchase could reduce mortgage rates by 10 to 50 basis points, potentially lowering the 30-year fixed mortgage rate to around 6.0%, which may boost new home construction and existing home sales.
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